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Anti-Money Laundering Act

Introduction

AN ACT DEFINING THE CRIME OF MONEY LAUNDERING, PROVIDING
PENALTIES THEREFOR AND FOR OTHER PURPOSES

It is hereby declared the policy of the State to protect and preserve the integrity and
confidentiality of bank accounts and to ensure that the Philippines shall not be used as
a money laundering site for the proceeds of any unlawful activity. Consistent with its
foreign policy, the State shall extend cooperation in transnational investigations and
prosecutions of persons involved in money laundering activities wherever committed.
SEC. 2. Declaration of Policy. Anti-Money Laundering Act of 2001 (RA 9160)


Money is the prime and vital reason for engaging in almost any type of criminal
activity. Money-laundering is the method by which criminals disguise the illegal origins
of their wealth and protect their asset bases, so as to avoid the suspicion of law
enforcement agencies and prevent leaving a trail of incriminating evidence.

From terrorist, drug traffickers, smugglers and different organized crime
syndicate also rely on money to sustain themselves and to carry out terrorist acts and
different forms of crimes. Money for terrorists and criminals are derived from a wide
variety of sources. While terrorists are not greatly concerned with disguising the origin of
money, they are concerned with concealing its destination and the purpose for which it
has been collected. Terrorists, terrorist organizations, and organized crime syndicate
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therefore employ techniques similar to those used by money launderers to hide their
money.

The ability to prevent and detect money-laundering is a highly effective means of
identifying criminals, terrorists, and traffickers the underlying activity from which money
is derived. The application of intelligence and investigative techniques can be one way
of detecting and disrupting the activities of terrorists, terrorist organizations and
organized crime syndicate.

And because they deal with other people's money, financial institutions rely on a
reputation for probity and integrity. A financial institution found to have assisted in
laundering money will be shunned by legitimate enterprises. For some local financial
center that is used for money-laundering can become an ideal financial secret haven.
Developing countries like ours that attract "dirty money" as a short-term engine of
growth can find it difficult, as a consequence, to attract the kind of solid long-term
foreign direct investment that is based on stable conditions and good governance, and
that can help them sustain development and promote long-term growth. Money-
laundering can erode a nation's economy by changing the demand for cash, making
interest and exchange rates more volatile, and by causing high inflation in countries
where criminals are doing business.

Most disturbing of all, money-laundering fuels corruption and organized crime.
Corrupt public officials need to be able to launder bribes, kick-backs, public funds and,
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on occasion, even development loans from international financial institutions. Organized
criminal groups need to be able to launder the proceeds of drug trafficking and
commodity smuggling. Terrorist groups use money-laundering channels to get cash to
buy arms. The social consequences of allowing these groups to launder money can be
disastrous. Taking the proceeds of crimes from corrupt public officials, traffickers and
organized crime groups is one of the best ways to stop criminals in their tracks.
In recent years, the national community has become more aware of the dangers that
money-laundering poses in all these areas and many Governments and jurisdictions
have committed themselves to taking action. The Philippine government and also other
international organizations are committed to helping them in any way they can.
Criminals are now taking advantage of the globalization of the world economy by
transferring funds quickly across from local to international and borders.